Sandy, the Election, a NorEaster – It’s Time for a Cruise

Nobody would blame you if you wanted to take time off for a cruise after the events of the the last two weeks. And perhaps many are thinking that way. For those of you sticking around you can enjoy the cruise vicariously through the stocks of the two major cruise lines Carnival Corporation, $CCL and Royal Caribbean Cruises, $RCL. Both stocks have been in uptrends and are offering potential entry points.

Carnival Corporation, $CCL, has been trending higher off of a bottom in March. But over the last two months it has built an ascending triangle pattern, tightening the pressure against resistance at 39.20. A move over that level triggers a pattern target of 42.40 and it has support for the break out from a bullish Relative Strength Index (RSI) and a Moving Average Convergence Divergence indicator (MACD) that is positive. There is also the 3-box reversal Point and Figure (PnF) price objective higher at 48. Wait for the break to enter long. As an alternative to the stock you might look at the December 39/42 Call Spread which is selling for about $1. This limits any potential loss to $1 and still has a reward to risk ratio of 3:1.

Royal Caribbean Cruises, $RCL, is not quite as clean cut but also attractive. it has risen from a base over the summer and consolidated in an expanding wedge through September and October. Breaking the wedge higher last week carried an initial target of 36.25 followed by 37.25. What makes it most interesting is the retest of the breakout. Should it hold and reverse you can get long versus the wedge breakout level and ride to the target. Or, if you have patience, the PnF chart carries a price objective up to 60.

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)

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This material is provided for informational purposes only, as of the date hereof, and is subject to change without notice.This material may not be suitable for all investors and is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities.